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Civil Resource Manual 191. Termination Of Bankruptcy Jurisdiction


Termination of Bankruptcy Jurisdiction

1. Generally
2. Post-confirmation jurisdiction
3. Effect of Appeal On Court's Jurisdiction

 1.   Generally.  Bankruptcy jurisdiction normally ends once the estate is settled and  property transferred.  Free-Tan Corp. v. 49-50 Assocs. (In re Liberty  Music and Video, Inc.), 50 B.R. 379 (S.D.N.Y. 1985).  Dismissal of a  bankruptcy case normally results in dismissal of related adversary  proceedings, but court has discretion to retain jurisdiction.  Porges v.  Gruntal & Co. (In re Porges), 44 F.3d 159, 162-63 (2d Cir. 1995)  (although the "general rule favors dismissal" of adversary proceedings when  the underlying bankruptcy case is terminated, this is not "automatic");  Fid. & Dep. Co. of Md. v. Morris (In re Morris), 950 F.2d 1531, 1534  (11th Cir. 1992) (same); In re Davison, 186 B.R. 741, 742-43 (Bankr.  N.D. Fla. 1995) ("actions that depend upon the existence of the bankruptcy"  -- here an action to recover preferential transfers --  must be dismissed  when the bankruptcy case is dismissed); Roddam v. Metro Loans, Inc. (In  re Roddam), 193 B.R. 971 (Bankr. N.D. Ala. 1996) (ordinarily, dismissal  of bankruptcy case will result in dismissal of all pending adversary  proceedings but considerations of judicial economy, convenience and fairness   may permit proceeding to continue); In re Hanks, 182 B.R. 930 (Bankr.   N.D. Ga. 1995) (court lacks jurisdiction to enforce settlement which  required dismissal of case; after dismissal, enforcement of the settlement  was a contract claim to be disposed of under applicable state law).         2. Post-confirmation jurisdiction.          After confirming a plan, bankruptcy courts should exercise jurisdiction only   over controversies involving interpretation and enforcement of the plan.   Compare Lacy v. FDIC (In re Lacy), 183 B.R. 890, 894 (Bankr.  D. Colo. 1995) (court has no post-confirmation jurisdiction over property  already returned to the debtor), H & L Developers, Inc. v. ARVIDA/JMB  Partners (In re H & L Dev., Inc.), 178 B.R. 71, 75-76 (Bankr. E.D. Pa.  1994) ("once a plan has been confirmed, the court's jurisdiction begins to  weaken;" complaint which raises non-bankruptcy causes of action and does not   seek to "interpret, implement or enforce" the plan must be dismissed),  Omega Corp. v. IRS (In re Omega Corp.), 173 B.R. 830 (Bankr. D. Conn.   1994) (court retains jurisdiction post- confirmation only over "matters  involving the execution, implementation, or interpretation of the plan's  provisions, and to disputes requiring the application of bankruptcy law"),  and A.R.E. Mfg. Co. v. United States (In re A.R.E. Mfg. Co.),  138 B.R. 996 (Bankr. M.D. Fla. 1992) ("Bankruptcy courts should exercise  postconfirmation jurisdiction only for compelling reasons.") with  Bernstein v. Donaldson (In re Insulfoams, Inc.), 184 B.R. 694 (Bankr.   W.D. Pa. 1995), aff'd, 104 F.3d 547 (3d Cir. 1997), and MAI   Sys. Corp. v. C.U. Techs., Inc. (In re MAI Sys. Corp.), 178 B.R. 50, 52  (Bankr. D. Del. 1995) (both holding that court's post- confirmation  jurisdiction is as broad as it is pre-confirmation; it extends to "any  proceeding that conceivably could affect the debtor's ability to consummate  the confirmed plan").  Bankruptcy jurisdiction is conferred by statute and cannot be conferred by a   plan.  New Horizon of NY LLC v. Jacobs, 231 F.3d 143 (4th Cir. 2000),   cert. denied, 121 S. Ct. 2192 (2001).  Compare Holly's,  Inc. v. City of Kenwood (In re Holly's, Inc.), 172 B.R. 545, 554-557  (Bankr. W.D. Mich. 1994) (jurisdiction unchanged by confirmation but  reservation of jurisdiction in plan meaningless), aff'd, 178 B.R. 711   (W.D. Mich. 1995) with  Kalamazoo Realty Venture L.P. v.  Blockbuster Entm't Corp., 249 B.R. 879 (N.D. Ill. 2000) (reservation of  jurisdiction in plan did not give bankruptcy court more than "related to"  jurisdiction and did not prevent concurrent jurisdiction of a district  court), Dutch Masters Meats, Inc. v. IRS (In re Dutch Masters Meats,  Inc.), 182 B.R. 405, 408 (Bankr. M.D. Pa. 1995) (bankruptcy jurisdiction   generally ceases upon confirmation, but plan may reserve jurisdiction over  certain matters), and Scotland Guard Servs. v. Autoridad de  Energia Electrica (In re Scotland Guard Servs.), 179 B.R. 764, 768-69  (Bankr. D.P.R. 1993) (post-confirmation is "limited" and "[w]hether or not  the court retains jurisdiction, and to what extent, depends upon the  provisions of the confirmation order;" however, court notes that it cannot  obtain jurisdiction "by inserting a provision in the plan").  See Boco Enters., Inc. v. Saastopankkien Keskus-Osake- Pankki (In  re Boco Enters., Inc.), 204 B.R. 407 (Bankr. S.D.N.Y. 1997) (judicial  economy, convenience to parties, fairness, and comity guide courts in  determining whether to exercise jurisdiction of "related to" proceeding  after case dismissed); accord Doddy v. Oxy USA, Inc., 101 F.3d   448 (5th Cir. 1996); see also Chapman v. Currie Motors, Inc.,  65 F.3d 78 (7th Cir. 1995).          3. Effect of Appeal On Court's Jurisdiction.  "The filing of a notice of appeal is an event of jurisdictional significance  --  it confers jurisdiction on the [appellate court] and divests the [trial  court] of its control over those aspects of the case involved in the  appeal."  Griggs v. Provident Consumer Disc. Co., 459 U.S. 56, 58  (1982) (per curiam).    Appeal from an order does not deprive bankruptcy court of jurisdiction over  all aspects of the case.  In re Strawberry Square Assocs., 152 B.R.  699 (Bankr. E.D.N.Y. 1993).  The court retains jurisdiction when (1) the  matter is not related to the issues involved in the appeal; (2) the order  appealed is not appealable or is clearly frivolous; and (3) the court's  action would aid in the appeal.  Bryant v. Smith (In re Bryant), 175  B.R. 9, 11-12 (W.D. Va. 1994).  Although the filing of an appeal divests the   lower court of its control over matters on appeal, the court retains  jurisdiction to implement or enforce the order or judgment but not to expand   upon or alter it.  DiCola v. Am. S.S. Owners Mut. Prot. & Indem. Ass'n  (In re Prudential Lines, Inc.), 170 B.R. 222, 243-44 (S.D.N.Y. 1994),  appeal dismissed, 59 F.3d 327 (2d Cir. 1995); accord NLRB  v. Cincinnati Bronze, Inc., 829 F.2d 585 (6th Cir. 1987) (bankruptcy  court may enforce or implement (as opposed to alter) a judgment despite  filing of appeal); NBD Bank v. Fletcher (In re Fletcher), 176 B.R.  445, 446 n.1 (Bankr. W.D. Mich. 1995) (rendering a written opinion after a  party filed a notice of appeal is permissible as an aid to the appellate  court's review).               Filing of a notice of appeal deprives the bankruptcy court of jurisdiction  to enter orders that would affect or modify any issue or matter on appeal.   Bialac v. Harsh Inv. Co. (In re Bialac), 694 F.2d 625 (9th Cir.  1982); Hyman v. Iowa State Bank (In re Health Care Prods.), 169 B.R.  753, 755 (M.D. Fla. 1994) (filing notice of appeal from appealable order  divests lower court of jurisdiction over issues related to the appeal;  bankruptcy court lacked jurisdiction to strike affidavit following grant of  summary judgment on turnover complaint and opponent's filing of notice of  appeal); In re Neuman, 67 B.R. 99 (S.D.N.Y. 1986) (no jurisdiction to   modify appealed order); In re Maurice, 179 B.R. 881 (Bankr. N.D.  Ill.) (bankruptcy court lacks authority to provide guidance or modify order  pending appeal), aff'd 69 F.3d 830 (7th Cir. 1995); In re  Commodore Corp., 87 B.R. 62 (Bankr. N.D. Ind. 1987) (no jurisdiction to  "do anything that impacts on any issues or matters on appeal").  But  see In re Allen-Main Assocs. L.P., 243 B.R. 606, 609 (D. Conn.  1998) (appeal of dismissal order did not deprive lower court of jurisdiction   over alleged debtor's claim for attorney fees).
Updated February 19, 2015